Business

PUC to investigate low-cost ride-sharing services Lyft and uberX

The Colorado Public Utilities Commission is considering whether to investigate unregulated ride-sharing services offered by San Francisco-based startups Lyft and Uber Technologies.

"The commission staff believes that they are providing common carrier service and they fall under the regulation of the commission," said PUC spokesman Terry Bote. The commission will take up the issue at its Wednesday meeting.

Lyft launched in Denver in September. Uber began offering its ride-sharing service, called uberX, in the market in October. Users hail drivers for both services via smartphone apps.

Unlike Uber Black, drivers for uberX and Lyft use their own vehicles. Lyft drivers mark their cars by placing a fluffy pink mustache on the grille.

Safety concerns surround the ride-sharing services because the vehicles are not inspected by regulators, and drivers don't undergo background checks with the PUC, Bote said.

Advertisement

Uber Denver general manager Will McCollum said the company performs background checks on drivers and rigorous inspections of vehicles. Uber also offers supplemental insurance on top of a driver's insurance policy to ensure that riders are covered.

"(UberX) provides consumers a reliable transportation option through the convenience of the Uber app," McCollum said. "It's 30 percent cheaper than a taxi and still reliable."

Lyft, which operates in more than a dozen cities, may have skirted transportation rules in other markets by classifying its rides as free. The Lyft app asks riders for a donation, with a suggested amount, when they're dropped off.

"We have been in touch with the Colorado PUC and see this as an opportunity to continue the conversation about Lyft's peer-to-peer business model and commitment to safety," Lyft cofounder and president John Zimmer said in an e-mail. "Current PUC rules were written prior to a solution like Lyft being possible and Lyft is not a common carrier."

Lyft spokeswoman Paige Thelen added that the company's safety measures include extensive background checks of drivers and vehicle inspections. She said the service hasn't been outlawed in any jurisdiction.

After Wednesday's hearing, the PUC will send letters to Lyft and Uber outlining staff concerns. The companies will have 30 days to respond, after which the commission will decide whether to pursue an investigation.

In the meantime, Lyft and uberX can continue to operate, though the companies may be subject to enforcement penalties. Bote said legislative action may be required to update the state's transportation rules to factor in the new services.

The Uber Black battle in Colorado generated backlash from technology enthusiasts who believe regulatory oversight of the service could stifle innovation and drive startups away from the state. Taxi companies have been chief opponents of Uber and related services, arguing that the startups have an unfair advantage because they don't face similar regulations.

Missy Franklin, Jenny Simpson, Adeline Gray and three other Colorado women could be big players at the 2016 Rio OlympicsWhen people ask Missy Franklin for her thoughts about the Summer Olympics that will begin a year from Wednesday in Rio de Janeiro, she hangs a warning label on her answer.